Third Quarter Financial Results

Fluidigm Continues Descent

Fluidigm reported another disappointing quarter, as third quarter sales slumped 22.5% to $22.2 million due to increased competition and weak operational execution. The company missed revenue guidance on all three of its projected growth drivers, including single-cell biology, new products and applied market consumables. Instrument sales were particularly weak, especially for genomics systems. However, demand remained sturdy in China, and Service revenue climbed 19.1%.

Total Product sales tumbled 28.3% to account for 81% of revenues. Sales to research and applied customers contracted 23% and 36% to account for 66% and 34% of Product sales, respectively. Instrument sales fell 39.1% as demand for Helios and BioMark systems diminished dramatically.

fluid pie

The sharply lower-than- projected demand for Helios systems was attributed to rising competition, as well as longer sales cycles from applied customers and timing of shipments. Faced with similar timing and competitive challenges, as well as specific systems’ inactivity, consumables sales underperformed expectations, falling 12.2%. Demand for integrated fluidic circuits for genomics preparatory systems were particularly weak. On the positive side, proteomic reagent sales increased, and consumables sales for the mass cytometry business expanded 30%.

Europe was largely impacted by the lower demand for C1 systems, as sales for the region faltered 48.3%. US and Other sales declined 8.1% and 40.4%, respectively. Conversely, sales in Asia-Pacific advanced 2.6%, as strength in China offset weakness in Japan and other Asian regions.

Adjusted Product gross margin contracted 197 basis points to 70.2% due to product mix and lower production volume. Adjusted operating loss widened 79.2% to $14.1 million.

While 2016 sales will certainly fall below the company’s previous outlook of $124–$128 million, Fluidigm did not provide updated guidance. The company is in the process of an internal business analysis as well as operational modifications.

fluid table

NanoString Delivers Strong Growth

Third quarter sales for NanoString Technologies jumped 52.5% to $23.9 million. Collaboration revenue advanced 167% to make up 20% of sales. Product and Service revenue rose 39% excluding currency to account for 80%, led by record instrument placements and strong demand for life science consumables. By end-market, academic sales climbed roughly 30%, including approximately 50% revenue growth for instrumentation. Biopharmaceutical sales growth was even more robust with strength in both instrumentation and consumables.

Instrument sales jumped 62.1% as a result of broader adoption of the nCounter SPRINT Profiler system, but included a partial benefit from missed orders in the first quarter. The company placed more than 20 SPRINT systems during the quarter, of which 80% were to new customers, primarily academic researchers. However, as expected, the lower pricing for the SPRINT Profiler, which accounted for roughly half of all instruments sold, partially offset revenue growth. On a cumulative basis, the company’s total installed base expanded nearly 40% to more than 450 systems, including approximately 55 SPRINT systems.

nano table

Life science consumables sales advanced 23%, including roughly 35% and 15% sales growth to biopharmaceutical and academic customers, respectively. Accounting for nearly half of life science consumables revenues, sales of Panel products jumped 45%.

While still relatively only a small part of sales, Prosigna IVD kit revenue advanced 73% due to expanded reimbursement coverage.

Overall, sales in the Americas climbed 53.6% to account for 70% of revenues. Including currency, sales in Europe/ Middle East and Asia Pacific expanded 45.1% and 62.4% to make up 21% and 9% of revenues, respectively. The company highlighted particular strength for instrumentation in Europe. In addition, sales in China remained robust, as the country accounts for the second largest installed base of nCounter systems behind the US.

Operating loss was roughly unchanged at $8.5 million. The company maintained its 2016 sales outlook of $89–$93 million, including Collaboration revenue of $18 million.

Sartorius Reports Steady Growth

Third quarter sales for Sartorius’ Lab Products & Services Division (LPS) grew 9.5%, roughly 4% organically, to €82.7 million ($91.9 million = €0.90 = $1) to account for 24% of revenues.

Acquisitions contributed approximately 6% to segment revenue growth, while currency headwinds lowered growth by 1%.

Including acquisitions, LPS sales in the Americas, Asia Pacific and Europe expanded 27.6%, 7.5% and 4.5%, respectively. Segment orders grew 11.3% in local currency including acquisitions. Similarly benefiting from the acquisitions, LPS adjusted EBITDA margin improved 68 basis points to 16.2%. The company maintained its 2016 LPS sales growth outlook of 6%–9%, including 3% growth from acquisitions.

sart pie

< | >